Average asking prices for residential properties in the UK rose by just £14 (€16) in February from January, data from property website Rightmove showed last Monday. This is the smallest rise on record for a month which usually experiences a big seasonal increase.
The online property portal was not the only real estate company observing a slowdown in the market. The Royal Institute of Chartered Surveyors recently said British homebuyer demand is currently at its weakest since 2009.
Rightmove said that though the reading was low, it “could be seen as a positive indicator for the year ahead”. There were concerns that house prices would plumet as a result of interest rate hikes, but this reading shows otherwise.
Separately, eurozone private sector business activity rose at the fastest pace in nine months in February, raising the possibility that the currency bloc can avoid a downturn this quarter.
The S&P Global eurozone composite Purchasing Managers’ Index (PMI), which includes both manufacturing and services sector activity, came in at 50.2 in January, up from 49.3 in December, and beating a consensus forecast of 49.8. Readings above 50 indicate expansion in activity.
The survey also shows that demand is improving, which is considered as surprising given the high inflation and the downturn in domestic demand in the fourth quarter in larger eurozone economies.
Finally in the US, the minutes of the Federal Reserve’s latest monetary policy meeting, which ended on February 1, showed that almost all policymakers backed the decision to raise the benchmark interest rate by a quarter of a percentage point, while only a few preferred a half-point increase.
Fed officials are indicating that a resilient American economy could lead them to raise interest rates somewhat higher than they had anticipated, determined to tame high inflation.
The minutes noted that all participants continued to anticipate that ongoing rate increases would be needed to achieve the Fed’s dual objectives of maximum employment and an inflation rate of two per cent over the longer run.
This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).